The global automotive financing services market is anticipated to grow at a CAGR of 9.2% during the forecast period. The growing urbanization has driven the need for self-driven mode of transportation which in turn is driving the growth of the global automotive financing services market. Automobiles are expensive products that a middle- or lower  income person cannot purchase with a single payment. However, human life is now highly dependent on vehicles for traveling needs. Thus, the financing institutes provide a buy now, pay later facility to vehicle purchasers with simple interest rates. The growing vehicle sales (including agricultural, transportation, and other vehicles) are the major driving factor for the automotive financing services market. The online financing services are expected to drive the market during the forecast period with the rising mobile and internet penetration across the globe. 

The hassle-free, quick, and without guarantee financing services are the emerging trends in the market which attractthe majority of customers. Market players are offering a variety of such services which can satisfy these varying needs of customers. The financing services with consultancy are gaining popularity, which can recommend them the best vehicle that suits their requirement. The rising trend of cab services, EVs, and autonomous vehicles will generate new opportunities for the automotive financing services market in the near future. The increasing R&D investments for electric and autonomous vehicles are expected to drive the growth of the market during the forecast period.

Impact of COVID-19 Pandemic on Global Automotive Financing Services Market

The COVID-19 pandemic had suspended the manufacturing of automotive vehicles due to lockdowns and facility shutdowns. According to the International Organization of Motor Vehicle Manufacturers (OICA), the global production of automotive vehicles in 2020 was down by 16.0% as compared to the previous year. Additionally, the buyers avoided spending on non-essential, expensive products that drastically reduced the sales of automotive vehicles by 12.0% in 2020. The financing institutes had suffered great trouble during the pandemic, as they had faced huge numbers of bankruptcy during the pandemic period, as the majority of people were unable to pay their loan installments. However, soon the market got momentum in the last quarter of 2020, with the relaxations in the COVID-19 restrictions. Still, the uncertainties of the pandemic may hinder the market growth in the future, as experts predict the reoccurring waves of the COVID-19 pandemic.

Segmental Outlook 

The global automotive financing services market is segmented based on the vehicle condition, source type, and vehicle type. Based on the vehicle condition, the market is segmented into new vehicles and used vehicles.Based on the source type, the market is segmented into OEMs, banks, and others. Based on vehicle type, the market is sub-segmented into passenger vehicles and commercial vehicles.

Global Automotive Financing Services  Market Share by Vehicle Condition, 2020 (%)

The New Vehicles Segment Holds the Major Share in the Global Automotive Financing Services Market

Based on vehicle condition, the new vehicles hold the major share in the automotive financing services market as most of the used vehicles are purchased without financing. However, now the used vehicles are gaining popularity amongst customers and its market is expected to witness the fastest growth during the forecast period.

Based on source type, the bank segment holds a prominent share in the market as banks are more reliable than other service providers and also offer financing at lower interest rates. The OEM segment is expected to grow at a considerable rate during the forecast period, as OEMs provide better after-sales services to customers.

Regional Outlooks

The global automotive financing services market is further segmented based on geography including North America (the US, and Canada), Europe (Italy, Spain, Germany, France, and Rest of Asia-Pacific), Asia-Pacific (India, China, Japan, and Rest of Asia-Pacific), and the Rest of the World (the Middle East and Africa, and Latin America).  

Global Automotive Financing Services  Market Growth by Region, 2021-2027

Asia-Pacific Contributes a Prominent Share in the Global Automotive Financing Services Market

The Asia-Pacific region holds a prominent share in the automotive financing services market, as the region is the hub of automotive manufacturing. According to the OICA, around 44.3 million vehicles were produced in the Asia-Pacific region in 2020, which is around 57.0% of global vehicle production. China, Japan, and India are the major contributors to the regional market. The supportive government subsidies for the production as well as the purchase of automotive vehicles are the major driving factor for the growth of the automotive financing services market in the region. Used cars are expected to grow fastest in the region, due to their increasing demand. North America and the European regions follow Asia-Pacific in market share. The sales of luxury cars are the major driver in the market of North America and Europe.

Market Players Outlook

Some of the major companies operating in the global automotive financing services market include Hitachi Ltd., Bank of America Corp., Ford Motor Credit Co., Toyota Financial Services, and Volkswagen Financial Services among others. The market players are considerably contributing to market growth by adopting various strategies, including mergers & acquisitions, collaborations, funding, and new product launches, to stay competitive in the market. For instance, In August 2021, OTO Capital, an automotive financing startup had raised $6 million from Prime Venture Partners, 9Unicorns, Better Capital, and marquee angel investors.

The Report Covers

• Market value data analysis of 2020 and forecast to 2027.
• Annualized market revenues ($ million) for each market segment.
• Country-wise analysis of major geographical regions.
• Key companies operating in the global automotive financing services market. Based on the availability of data, information related to new product launches, and relevant news is also available in the report.
• Analysis of business strategies by identifying the key market segments positioned for strong growth in the future.
• Analysis of market entry and market expansion strategies.
• Competitive strategies by identifying ‘who-stands-where in the market.